Employment Law Changes in 2014

The government’s long-term programme to review employment law continues in 2014 and many changes will be introduced this year. In this article, employment law specialist Stephen Levinson identifies some of the more important. According to the poet, April is the cruellest month: this may or may not be the reason that most of the changes are to be introduced at that time.

Flexible working changes

A number of changes affect families. The right to request flexible working is to be extended to all employees, and the current procedure for considering requests will also be changed. Employers will have a duty to consider all requests in a reasonable manner, but there will be a right to refuse requests on business grounds. These changes are being introduced under the Children and Families Bill which is currently in the report stage in the House of Lords, but the implementation date has been announced as 6 April 2014.

TUPE changes

There are a number of changes to TUPE coming this year, the first of which came into force at the end of January and permits the transferee to conduct pre-transfer consultation for redundancies that occur at the same time as a TUPE transfer. This change means that a transferee is able to consult with the transferor’s employees. This is not a straightforward rule and will require agreement from the transferor. The time spent in consultation before the transfer is to count as part of the period required under the redundancy laws, so all or part of the necessary consultation can take place before the date of the transfer. While complicated, the rules should be beneficial to those acquiring businesses in these circumstances. Also, a new rule concerning employee liability information comes into effect in May 2014. This will require the information to be provided a minimum of 28 days before the transfer rather than the currently inadequate period of 14 days. Finally, in relation to transfers occurring after 31 July 2014, employers of businesses with 10 or fewer employees will be able to consult directly with those employees rather than an elected committee, provided they are not represented by a trade union.

Changes to the tribunal process

Employment tribunal litigation is also due for a change in April 2014. From that date, all claimants will have to inform ACAS that they propose to bring a claim, and will be asked whether or not they wish to engage in pre-litigation conciliation. There are a number of unresolved issues about this process.

First, there is the issue whether many respondents will elect to agree to conciliation. They do not have to do so, and it is anticipated that many will wait and see whether the claimant is willing to pay the fee that is now required to bring a tribunal claim.

Second, there is the question of whether ACAS will have sufficient resources to manage the new scheme effectively. The government promised adequate funding for the scheme and then decided that a frozen budget rather than a cut would be sufficient. This contrasted with the figure of £13m requested by ACAS. The reasoning may well have been because the introduction of fees was anticipated to reduce considerably the volume of tribunal litigation. So far, that prediction appears to have been accurate as numbers are reported to have dropped significantly, but it is as yet unclear whether this is a short- or long-term phenomenon.

Finally, the application for conciliation can have a confusing effect on the time within which a claim may be presented to a tribunal as it involves a ‘stop-the clock’ process of the usual three-month limit. Another certainty (at least in unfair dismissal cases) will therefore disappear from employment law.

Equality law changes

In the area of equality law there are two principal changes coming. From 6 April 2014 the discrimination questionnaire process is abolished. This is the procedure that enables individual claimants to obtain information from an employer (before a claim is presented) that might be used as evidence at the hearing. Frequently these were troublesome for employers who complained about them regularly, and the abolition helps to remove the burdens on business. Claimants’ representatives naturally objected to the abolition. Perhaps a balancing feature in political terms is that from October, employment tribunals are to be given the power to order equal pay audits if an employer has breached the equal pay requirements of the Equality Act 2010. Naturally, objections to this are coming from employers.

Fines for breach of employment rights

Also in the ‘balancing’ agenda, with effect from April 2014 employment tribunals will be able to fine employers who breach employment rights. The amount of the fine is to be 50% of the award made to the employee, subject to a minimum of £100 and a maximum of £5,000. For reasons best known to itself, the government has decided to treat this fine rather like a parking ticket and provide a 50% reduction if it is paid within 21 days of the notice received from the tribunal. The monies recovered will go to the Treasury. The range of the fine seems unduly limited, but it may well be increased in the future.

Pension changes

There are also new rules relating to pensions coming into effect in 2014. From 1 April under the auto-enrolment provisions, the period of time for implementation will be extended from four weeks to six weeks, and during 2014 auto-enrolment provisions will be applied apply to employers with between 350 and 499 employees. Employers with 58 or more employees will be affected by the start of 2015.

Compensation

A minor change being introduced in April 2014 is the review date of levels of compensation of a week’s pay. This has taken place in in February for a number of years, but in the future the review will happen in April. Such levels of compensation are applied in most claims before tribunals, including unfair dismissal and redundancy claims.

National Insurance changes

The range of changes extends to tax, as the National Insurance Contributions Bill introduces in April the Employment Allowance, which will give businesses and charities a £2,000 allowance on their National Insurance contributions.

Free occupational health assistance

A new service may also be introduced in the Spring. This is the Health and Work Service which will offer free occupational health assistance to employees, employers and GPs, to include an independent assessment of employees who have been off sick for four weeks. At present the exact timing is unconfirmed.

Woolworths court case heads to European Court of Justice – worth keeping an eye on if you are planning to dismiss 20 or more employees

The picture would not be complete without reference to one very significant case which may be resolved this year. This is the ‘Woolies’ appeal which has been shunted to the European Court of Justice.

The Employment Appeal Tribunal has declared that when counting whether 20 or more employees have been dismissed, one does not need to take account of whether they are situated in one establishment but simply count the totals involved. This has thrown into confusion a long-established understanding of redundancy law including the understanding of how employers are to report impending redundancies, as the existing structure and forms provided by government assume this is to be done on an establishment basis. Definitely one to watch.

This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.

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